You've Been Acquired, Now What?

Ian Jackson is a managing partner with Enshored, an operations consultancy and outsourcing business based in Los Angeles. Prior to founding Enshored, Jackson worked for 20 years in financial technology, leading global businesses for Barra, Multex, Reuters, Dealogic, and Fitch Ratings.

Many entrepreneurs and those working for them dream of the day that their firm is taken over. Often at a point of rapid growth for the company, a financial or industrial buyer will come in and provide a liquidity event for the founders and key employees. It's what keeps so many start ups going. We all are drawn to the romance of the successful exit. An exit may mean for a few that they never work again. For most though, it simply leads to a new range of challenges and questions to be addressed, albeit with the advantage of a more bulging pocket book as reward for their efforts to that point.

As well as speaking to many peers on the subject, I've been bought out three times. This experience has given me plenty exposure to the conflicting emotions that come out after the champagne corks have been popped and the checks written.

What can I learn here?

When you get taken over you generally will find yourself part of a larger organization that has been around longer than your firm. However you feel about your firm, it is likely that the acquirer does some things really well. At the very least, you can make sure that you can use your now privileged position to quickly dive behind the curtain and learn how they really do things.

Sometimes what you will learn is that the only real advantage your acquirer has is its financial clout. When you get under the covers you may find a company that is on the decline and doesn't have any cutting edge products, processes or great potential mentors.
In the best situations, you will find a wonderful learning opportunity with an army of potential mentors and new ways of working that will speed up your career.

Do I want to work here?

The culture clash of putting together two very different cultures keeps many of the big consultancies busy. Change management is an under-rated discipline and is vital to achieving post merger synergies and delivering on the rationale for the transaction.
You need to quickly assess if the culture- both what the company promotes and the real, on-the-ground culture- are going to inspire you to do great deeds. Many large companies tell themselves that they have a great culture, but to outsiders from smaller firms they are stodgy, have excess middle management layers doing nothing but slowing things down, and a lack of true commitment to the cause. It can be a recipe for frustration and demotivation that if not addressed can be very damaging. If you are used to working whenever there is work to be done, and then find yourself sat alongside someone who lives a 9-5 lifestyle there are going to be plenty of problems.

What is the personal opportunity?

In larger firms different things can be valued and this can mean more opportunity for those who have them. For some there is a chance to get on a faster track. I have seen former colleagues who weren't necessarily star performers take large leaps forward as they saw that their hard work and diligence was helping them stand out against incumbent mediocrity. They carried the momentum and energy forward and ended up moving their careers forward rapidly. For others it can mean opportunity for lateral movement, be it the chance to work in a different function, a more specialist role, or in a different geography.
For many senior members of the acquiree though, it can quickly be seen that your lack of political capital and your obvious threat to incumbent management is going to spell frustration and near certain early exit.

In assessing what the opportunity is for you, it is completely up to you to find it. There is no chance anyone on the buy side has spent any time at all thinking what's in this for you personally, so it is important to start making connections quickly, and driving this forward yourself.

What other options do I have?

You may now have gotten your mortgage and student loans manageable, and maybe even funded your own kids' college funds. You may now have more liquid shares in a larger listed company that gives you some great future growth potential and options. Regardless of the payout, for most people the liquidity event rarely means early retirement. Do you really need to play golf every day or will you be satisfied in a new non-profit role? For most I'd say it is unlikely. I recently spoke to an executive who just sold up and is completing his earn out. Despite the amount of effort he put in over the past five years, all the luck he conceded having along the way, and enough money to keep him working on his handicap for at least a decade, he is working just as hard now to find his next gig as he can't handle the actuality of a 35 hour big corporate week.

A cautionary tale

The old adage be careful what you wish for rings very true here. For the best outcome it makes most sense to live in the present and enjoy the work you are doing and be satisfied with its rewards. Living for the future may not deliver all that you hope.